More Than A Better Mousetrap

Building a Better Mousetrap Is Not Enough

As a computer scientist by training, I rarely if ever considered the impact psychology and therefore consumer behavior has on the adoption of new, innovative products. The common adage, “Build a better mousetrap and the world will beat a path to your door”, made good enough sense. Unfortunately, it is not that simple! It might be if consumers were rational and acted in a manner that economic theory suggested, but they are not. Consumers are often irrational, and so, any mousetrap that confers economic benefit, may not be accepted in the marketplace if it requires consumers to change their habits. Even more curious (perhaps obvious) is that the degree of acceptable change invariably varies from consumer to consumer. It is all subjective. It all depends on your individual frame of reference.

Some Insights Into Consumer Psychology

One consumer may find a $50.00 bottle of wine cheap while the other might find it expensive. The person who finds a bottle at that price expensive may buy it anyway in fewer quantities for any number of hard to quantify reasons which reflect his or her respective experiences, attitudes, and background. Accounting for consumer behavior should therefore, be an integral part of any new product initiative. So whats an entrepreneur or small business owner to do?

The first is to recognize two characteristics: (1) consumers have a natural aversion to loss and that losses loom larger than gains, and (2) that these gains and losses are evaluated according to some frame of reference unknown to you. Having recognized these characteristics, the second step is to make a chart with two columns, a “what you get column ,” and a “what you give up” column and to make sure that the monetary and behavioral benefits associated with adopting your product far outweigh the monetary and behavioral costs. A person choosing NetFlix to fulfill their video rental needs for example gives up spontaneity in exchange for increased movie selection and home delivery. You have to ask, are enough people willing to make that trade?

Closing Thoughts

Under this framework, the products or services most likely to succeed are those that provide the same benefits (monetary and behavioral) at a lower cost or those that increase benefits while keeping costs the same. While products that increase benefits and increase costs may not fail, they could be subject to a much longer time to adoption. The aforementioned scenario is equivalent to asking your customers to change their behavior and then asking them to pay you to make that change.

If the use of your product requires customers to change, then brace yourself for the long haul and find yourself early adopters who serve as product evangelists. The alternative is to make the use of your product compatible with existing consumer behavior. Either way, building a better mousetrap by itself simply is not enough.

May 12, 2008 |

More Than A Better Mousetrap

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